U.K. Referendum Call Rattles Europe's Gilded Cage

European Union: U.K. Prime Minister David Cameron startled Europe by calling for a referendum on whether Britain should remain in the EU. It was a bid to sweeten Britain's EU terms, but may open a genie bottle.

Promising that if he is re-elected in 2015, a referendum on Britain's membership with the EU will follow, Cameron's gambit is in part a bid to pull the fast-growing United Kingdom Independence Party (UKIP) back into the conservative fold.

But it's also seen as leverage against Brussels to lighten Britain's membership terms so that Cameron can get elected on a better economy for Britain.

So his call for a "no" vote on his own referendum amounts to a "very curious position," as conservative politico Michael Portillo put it. And in reality, it probably won't work the way he expects, because he's playing with some powerful economic forces.

UKIP, which favors independence from the EU, thinks voters will say yes, and the vote lets "the genie out of the bottle."

And the eurocrats of Brussels feel the same — EU hard-liner France, not the surrendering type with its bureaucratic fiefdom on the line, warned Britain there is no "a la carte" membership terms, while the EU's other pillar, Germany, argues for more integration — not less.

It makes Cameron's call the riskiest proposition since Indonesia's President B.J. Habibie impulsively allowed a referendum on East Timor and discovered that yes, the Timorese wanted independence, losing Indonesia a sizable chunk of territory in 1999.

On the EU table is so-called "banking integration" and a new stock tax Brussels expects to raise $76 billion from 11 countries. Such a move not only leaves Britain on the sidelines, it also kills off the big market Britain is supposed to benefit from by EU market access — except perhaps for capital flight from frightened investors.

What does Britain really get for its EU membership?

Mainly, a sizable dues burden — 10%, or $17 billion, the third-largest share of national contributions as Europe's fourth-largest economy.

For that, it gets just $6.2 billion in return.

It also gets a tsunami of meddlesome regulations that include everything from the size of its vegetables and fruits, to its use of English nonmetric measurements and other outrages the EU tries to cover up as news of them leak out.

And, thanks to the EU's Common Agricultural Policy based on massive subsidies, Britain also suffers from artificially high food prices and its once-robust fishing industry has vanished.

Worst of all, 80% of Britain's labor force works in services. But the EU has reneged on a services treaty, putting Britain's needs on a back burner even as its economy shows tortoise-slow GDP growth of -4% in 2009, 1.8% in 2010, and 0.8% in 2011.

Nor is the EU really that good of a market for Britain. In addition to the failure of the services treaty, low growth rates in the EU mean sales are slow for British firms. Already Britain buys more from Europe than Europe buys from Britain.

With the EU's anti-growth policy and a lingering euro crisis, there are plenty of Britons who want to assess what Britain's real interests are.

Right now, pollsters note that the British public doesn't seem interested in a referendum. But that may be a function of the fact that Cameron's Britain is full of growth-killing policies of its own.

Britain's 41% average tax burden exceeds that of France, and Britain is losing its best workers because of it. In the 10 years to 2011, some 3.6 million Britons left the country. Nearly 2 million of those were in their prime working years, ages 25-44, and a considerable share were educated young professionals.

Sticking to Europe may make little sense unless the objective is a no-growth society.

And with Britain having good opportunities to unite by trade with its dynamic former colonies, will they really need Europe?

European Union: U.K. Prime Minister David Cameron startled Europe by calling for a referendum on whether Britain should remain in the EU. It was a bid to sweeten Britain's EU terms, but may open a genie bottle.

Promising that if he is re-elected in 2015, a referendum on Britain's membership with the EU will follow, Cameron's gambit is in part a bid to pull the fast-growing United Kingdom Independence Party (UKIP) back into the conservative fold.

But it's also seen as leverage against Brussels to lighten Britain's membership terms so that Cameron can get elected on a better economy for Britain.

So his call for a "no" vote on his own referendum amounts to a "very curious position," as conservative politico Michael Portillo put it. And in reality, it probably won't work the way he expects, because he's playing with some powerful economic forces.

UKIP, which favors independence from the EU, thinks voters will say yes, and the vote lets "the genie out of the bottle."

And the eurocrats of Brussels feel the same — EU hard-liner France, not the surrendering type with its bureaucratic fiefdom on the line, warned Britain there is no "a la carte" membership terms, while the EU's other pillar, Germany, argues for more integration — not less.

It makes Cameron's call the riskiest proposition since Indonesia's President B.J. Habibie impulsively allowed a referendum on East Timor and discovered that yes, the Timorese wanted independence, losing Indonesia a sizable chunk of territory in 1999.

On the EU table is so-called "banking integration" and a new stock tax Brussels expects to raise $76 billion from 11 countries. Such a move not only leaves Britain on the sidelines, it also kills off the big market Britain is supposed to benefit from by EU market access — except perhaps for capital flight from frightened investors.

What does Britain really get for its EU membership?

Mainly, a sizable dues burden — 10%, or $17 billion, the third-largest share of national contributions as Europe's fourth-largest economy.

For that, it gets just $6.2 billion in return.

It also gets a tsunami of meddlesome regulations that include everything from the size of its vegetables and fruits, to its use of English nonmetric measurements and other outrages the EU tries to cover up as news of them leak out.

And, thanks to the EU's Common Agricultural Policy based on massive subsidies, Britain also suffers from artificially high food prices and its once-robust fishing industry has vanished.

Worst of all, 80% of Britain's labor force works in services. But the EU has reneged on a services treaty, putting Britain's needs on a back burner even as its economy shows tortoise-slow GDP growth of -4% in 2009, 1.8% in 2010, and 0.8% in 2011.

Nor is the EU really that good of a market for Britain. In addition to the failure of the services treaty, low growth rates in the EU mean sales are slow for British firms. Already Britain buys more from Europe than Europe buys from Britain.

With the EU's anti-growth policy and a lingering euro crisis, there are plenty of Britons who want to assess what Britain's real interests are.

Right now, pollsters note that the British public doesn't seem interested in a referendum. But that may be a function of the fact that Cameron's Britain is full of growth-killing policies of its own.

Britain's 41% average tax burden exceeds that of France, and Britain is losing its best workers because of it. In the 10 years to 2011, some 3.6 million Britons left the country. Nearly 2 million of those were in their prime working years, ages 25-44, and a considerable share were educated young professionals.

Sticking to Europe may make little sense unless the objective is a no-growth society.

And with Britain having good opportunities to unite by trade with its dynamic former colonies, will they really need Europe?

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